Management Essay Example for Free

Management Essay Ny organization, whether new or old, small or big, requires certain methods, procedures and plans in place for its efficient functioning. For this to happen, they must develop and implement management concepts which help them implement their vision for the future of the organization. Index Planning Organizing Directing/Leading Controlling Staffing The Fifth Function The concept of functions of management was put forth by Henri Fayol, a management theorist from France, influential in proposing many of the management concepts in use today. Originally, he had proposed five management functions; amely, planning, organizing, commanding, coordinating and controlling. Modern texts have reduced the functions from five to four. They include planning, organizing, leading, and controlling. The four concepts of management, translated into functions lead to the creation of a cohesive organization. They can be seen here as a diagram. It is interesting to note that there is no hard and fast rule to be followed in the application of these functions, as management is a real-time decision-making system, any of these functions can be operational in conjunction with any other and also as ndependent entities themselves. Planning is the foundation pillar of management. It is the base upon which all other areas of management are built. Planning requires administration to assess where the company presently is and where it would be in the coming years. From there, an appropriate course of action is determined and implemented to attain the companys goals and objectives. Planning is an unending course of action. There may be sudden strategies required to be implemented during a crisis. There are external factors that constantly affect a company, both positively and negatively. Depending on the conditions, a company may have to alter its course of action regarding certain goals. This kind of preparation or arrangement is known as strategic planning. In strategic planning, management analyzes internal and external tactors that may affect the company, its objectives and goals. One of the primary tools of strategic planning is the use of SWOT Analysis, a technique that helps organizations find their strengths and weaknesses, identify areas of opportunity and take preventive measures against threats arising from both internal and external environmental factors.

Project Management: Commonwealth Games Opening Ceremony

Project Management: Commonwealth Games Opening Ceremony 1. Executive Summary The project plan is for the the forth coming Common wealth games scheduled to be held during the months of July August in 2014, in Glasgow. The official handing over will take place on the 14th of October 2010,when Delhi in India will handover officially to the city of Glasgow in Scotland, thus appointing Scotland as the Host country for the 2014 Common Wealth Games. It is to be noted that this event will be the largest multisport event ever to be held in Scotland Thus this report includes only of the opening ceremonys Schedule plan, resource allocation and the cost to be effect. 2. Project Introduction scope The recent growth of multi sports as an industry around the world means that the management can no longer be commercials. Events such as the commonwealth games, have a large impact on their communities and, in some cases, the whole country. Thus it is a must to keep in mind throughout the planning process that this is the first time the country is hosting such and event and it shall have an impact to the country. This is a service based scheduling project according to that the initial concern which I will propose will have the following scope which is needed to be completed to be successful in this events opening ceremony. Events Prepare the Events list Find the Human resource by events Find the Items the need in each resource (Dress, Transport and etc..) Analyze the risk and exciting of event with professionals Find the time of event execution Check the events identification (Traditional,etc) Security Check the security availability in the location need to be allocate Prepare high security zone in VIP guest Facilitate the vehicle parking Opening ceremony All task Analyzing Location Guest Prepare the chairs and audience resource Entrance and Exit point Guest area allocation Food and beverage invitation Schedule Time table Event list preparation Allocate Resource to events Allocate time to each and Every time /prepare schedule Media Invite an media Provide a food and beverage Supply the technical need (internet, power) Facilitate an location in ground area Physical resource Electricity Event Items Professional support 3. Objective To find all resource on time: Accurate time estimation is vital in project management. The two main reasons for estimating time is vital as: Time estimates drive the setting of dead lines for delivery of project and also the determination of pricing of projects and its profitability can be estimated. Thus finding all resources on time is very essential to carry on the project without delay as timing is important in an event like this as it has international criticism later on. To allocate funds according to budget Allocation of funds according to budget is a vital aspect, as it is an important tool needed in running a business in a proper manner. The allocation of funds should be done in such away that each responsible person can run the area smoothly without any interruption. To schedule all ceremony event on time without any delay Scheduling all events without a delay is very important as any delay occurring can cause disruption and run to high criticism. Prior to the main event rehersaling of the event should be done. When the rehersaling is done each aspect should be rehearsed without leaving out any event. Thus the above could be avoided. Reduce events errors Facilitate all participant to good service A specialized committee should be allocated the above task, of looking into the needs of the participants and giving them the best service. It is a must to keep in mind this is the event of the participants rather than the spectators. Allocation of physical force is a must to keep the reduction of the above. 4. Measure of Successful level and Recommendation for Each task /Plan and out comes Design/plan Execution Initiation Testing 1. Event activity design 2. Design Dress 3. Allocate the physical resource (music, Dress, Light) 4. Train the persons 5. Task allocate (Sub con) 1 proposal submission 2. Get quotation form 3rd party 3. Prepare the schedule 4. Find the resource 5. Evaluation and selection 1 .Events Activity test with time 2. Physical resource test 3. Schedule test with time 4Recovery test (Disaster) 1 Fixed the date time for each activity events 2. Fix all resource on time (physical human) 3. Execute according to tested schedule Opening Ceremony 1. Schedule monitoring and evaluating report 1 .Events Activity test Report with Reasal 2. Physical resource test Report 3. Schedule test with time test report 4. Recovery test plan (Disaster) 1 proposal Acceptance 2. Budget Approval 3. Schedule and Activity and Event Report 4. Resource Supplier report 1. Design Aspect of event and activity (Document and Demos) 2. Design Dress (Dummy) 3. Allocate the physical resource (music, Dress, Light) Demonstration 4. Train the persons plan and schedule 5. Resource plan and resource requirement 5.1 financial requirement analyses 5.1.1 Budget for the opening ceremony Overall opening ceremony should be allocated in 800 million. In Glasgow 2014 Common wealth Games committee, (Reference in: organization committee Budget allocation document) According to allocated overall budget allocation in 800 Million we will propose our proposal profitability of our plan would be quite satisfactory. 5.2.1 Variable cost breakdown and overall total This allocated budget should be dividing via the major Task event wise. This variable cost breakdown is based on the already allocated budget. Here is the variable cost breakdown: (All the values based on Millions) ÂÂ   Variable cost breakdown ÂÂ   Task/Event Actual cost Allocated cost Staff cost 100 100 Events cost 200 250 Media cost Entertainment 25 25 Security 50 55 Location Guest 10 15 Food Beverage 100 120 Transport 150 160 Total 635 755 Analyzing of the cost estimation: Here graph is explained all the variance in allocated cost and actual cost variance. 1 .Staff cost is fixed as I will explain it further in the organizational chart how the staff should be allocated in the project. After analyze I will fix the cost. 2. Event cost is variance because some creative events, equipments and rehearsal cost should vary, that the main reason to increase an additional 50 for it. 3 Media cost should be fixed. There should not be any risk for it 4. Security, food and transport cost should add some additions .because these are depended on the guest and humans to be involved their activities. Finally analyse all the expenditure additionally allocate a 120 Million for the risk factor wise. This should be variance cost for this. 5.1.3 Revenue breakdown and overall total Since the ceremony revenue is coming in as fallowing category based. Ticketing Suwannees and Advertisement Ground banners and Advertisement Sponsors Additionally in country has non profitable benefits on tourism. Total estimation is all the earnings should be 130 Million. Finally revenue should be in 175 Million. 5.2 physical requirement analyses Physical resources Allocation: Location its resource Allocation of resources will be predicted according to the requirements. Initially we analyze the location and its requirement. Location already decides and its resource should be available. Only need to identify repair and reconstruction points of it. After initial assessment all the reconstruct part and modification done by government .that mean I am not going to put its cost and allocation, Because its up to commonwealth standard achieving through the under supervisor on government and Olympic committee. Ceremony Entertainment and Events Other Ceremony entertainment and cultural and traditional events some expectation in physical equipment items, this is contributing with the one of sub contractor and service provider. Already that ceremony entertainment and event design committee proposal send to sub contractors to get quotation from them. Its basically going under the allocated budget. Because initial easements already done by entertainment and event committee. Services and Supply All other services should be contracted out to sub party. All sub contactors and their services should be evolved by physical resource evaluation committee. Food, transport, security, Entertainment an equipment supliers, electricityetc All these suppliers have to submit their proposal under evaluation committee satisfactory. Standards and Quality of services: This part should be maintained by the commonwealth country sports comate members. Their already provide the standards which have to be maintain for us. Evaluation committee evaluate all these under maintain of these standards. 5.3 Human resource requirement analysis We get divide in major in all HR resource in two categories. One is Project staff and organizing committee other one is out sauce persons who are the consult of the Events and activities. All the outsource consultants are working with us a part time. 5.3.1 Work break down structure Opening ceremony Food and Beverage Resource Events Activity Location and Ground Requirement Decoration Physical resource Furniture Traditional Dance Human resource Event items Events Actors Creative Dance Power Music items Music Dancers Water Lightning relevant Event Area special feature Ground Decorate Singers Musicians Power supplier Security Ground suppliers Designers This work break down structure should be view ad all Major activity tasks have to do in this ceremony process. This may provide a series of work brak downstrcture for planning and all implementation Events in ceremony. Each and every circumstance of the ceremony project and objectives this should be evaluated. This is providing a benchmark by which quality for the project process can be assessed and level can be successful. 6. Scheduling and Time plan 6.1 Recommended timings from October 2014 to the opening ceremony We are plan out to start as 15th of Arial 2014 in the project. We can finalize it 20 the July2014. If it can be execute 23 July 2014 to on word. Execution plan is 2 days final set up preparation .and Ready for final execution on opening ceremony on 23rd July 2014 6.1.1 Gantt chart and Key Milestone 6.1.2 Risk Analysis in Time Frame We decide to finish all the work and ready for ceremony in 1st 20 the July2014. That mean we handle finally 3days risk mitigation on the final execution. And other thing is most of the activity task going on par rally. Not depend on other task .that plan should be mitigate the time risk of the project. And other thing in Resource evaluation and physical resource allocation we get finish mid of September. Lighting, music, ground setup, activity basic set up. That is very impotent to reduce the Technical risk and the man power risk and also can mitigate the Disaster recovery in the ceremony time. 7. Task and Person allocation 7.1 Task and allocated Team Structure 7.2 Organizational Breakdown structure Project manager Supply manager Program manager HR manager Coordination manager Admin coordinator HR supply assistant Event and Activity Designer Resource finder Evaluation Committee Coordinator Service supply assistant HR coordinators Media coordinator Security Coordinator Physical resource supply assistant Project manager Food Beverage coordinator Secluded and Time maker Physical resource coordinator Additionally have a consultant on the ceremony event and activities as fawning professionals Artifact and designs Lighting Sounds Dancing and songs 8. Work procedure 8.1 Procurement management approaches The Procurement management plan should be defined to clearly identify the all task and the responsibilities for Procurement from the beginning to the end of the project .The project manager will work with the project team, contractors, supply department, and other key players to manage the Procurement activities. In order to our team structure all the managers (program, HR, Coordination and supply) responsible for their department wise activities to beginning to end of this project. Every department should be submitting their request as fallowing format. Supply manager have to be responsible to check with purchasing for each and every Items and service. Item/Service justification needed by/ date ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   Authorized to approve purchases for the project team: Project manager : warnapriya wijesundara Supply Manager : Lasantha balasuriya Purchasing officer : nalin weerasingha 8.2 Contractors and subcontractors managing Then first step in the contract approval process is to determine what items or services will require Procurement from outside. Then each and every department managers need to request what are they need service and items from project manager. Manager will evaluate it with an head of department managers and suplymanager the call to get quotation from out side vendors. And also need to finalize this with evaluation committee members with Olympic committee member in commonwealth. Vendors must have as fallows: Before start all the contractors should be need to register in the government ministry of import and export and construction in Scotland. Vendors have to submit their proposal include their service, cost and Items and their history of customers. All the Item and service need to up to evaluation committee standard. 8.3 Standard of maintain sub contractors Evaluation for Each project This section will explain the evaluation for the each and every service with vendors. Based on the following decision criteria Procurement manager, project manager, Purchasing manager and the international committee member evaluate all service and Items: Here is the area as we get evaluate: Ability of the vendor to provide all items by the required delivery date Quality Cost Expected delivery date Comparison of outsourced cost versus in-sourcing Past performance 9. Conclusion To conclude this proposal this project based on organizing the opening ceremony on Glasgow 2014 Commonwealth Games we will estimate all based on as initially 800 Million Dollars. After revenue analyzing we will think to take a 135 Million. As our suggestion is it can be done 755 Million. Our risk factor is 120 Million. The 120 Million is vary on the Glasgow 2014 Common wealth Games evaluation committee suggestion and request. This shows that the ratio of profitability of our plan would be quite satisfactory.

Immigration and Change as Natural :: Globalization Immigration Migration Essays

Immigration and Change as Natural Voyages: From Tongan Villages to American Suburbs, by Cathy A. Small, is both interesting and entertaining reading. This ethnography of social change of a Pacific island nation, is a fine example of how a system of chiefdoms evolves into a monetary system. It also served to demonstrate how this process affected immigration in mainstream America. My first reaction stemmed from a political theory class I took. This in conjunction with, sociologist Saskia Sassen’s article â€Å"Why Migration† , about the reasons why migration has become a key element of contemporary global society, brought to mind the writings of Karl Marx. Marx who lived from 1818-1883, write extensively on the capitalist form of government and criticized it openly. Although I do not agree with the Marxist school of thought in general, I saw many truths in the things that he proclaimed. Among these he addressed the inroads of capitalism and its corruption of other societies. These issues, along with the many readings we have had, brought to the forefront some of my own feeling of discontent with our present society and world globalization, a discontent different and at times very similar to those who migrate. In â€Å"Why Migration?†, Sassen states, â€Å"The central role played by the United States in the emergence of a global economy over the past 30 years lies at the core of why people migrate here in ever increasing numbers†(Sassen 14). The author goes on to tell how the flow of capitalist goods, services and information creates links between the United States and other countries. These links become bridges across which migrants, like the Tongans flow. With this in mind I could not help thinking how right Marx was, and how well he had forecasted Tongan transnationalism. In â€Å"The German Ideology† Marx writes, in reference to capitalists and their goods, â€Å"in place of old wants satisfied by the production of the country, we find new wants requiring for satisfaction the production of distant lands and culture.† He also writes, â€Å"In place of the old local and national seclusion and self-sufficiency we have intercourse in every direction, universal interdependence of nations† (Marx 162). This to me best sums up the transition of Tongan society. It seems to be the epitome of the issues Sassen raised in â€Å"Why Migration?†, issues that were relevant in Tonga’s new found transnationalism.

William Butler Yeats and William Blake :: Poetry Literature Papers

William Butler Yeats and William Blake A study of William Butler Yeats is not complete without a study of William Blake, just as a study of Blake is greatly aided by a study of Yeats. The two poets are inexorably tied together. Yeats, aided by his study of Blake, was able to find a clearer poetic voice. Yeats had a respect for and an understanding of Blake's work that was in Yeats' time without parallel. Yeats first read Blake at the age of 15 or 16 when his father gave him Blake to read. Yeats writes in his essay "William Blake and the Imagination" that "...when one reads Blake, it is as though the spray of an inexhaustible fountain of beauty was blown into our faces (Yeats, Essays xxx)." Yeats believed Blake to be a genius and he never wavered in his opinion. It is his respect for Blake that caused him to study and emulate Blake. He tried to tie Blake closer to himself by stressing Blake's rumored Irish ancestry. He strove to understand Blake more clearly than anyone had before him, and he succeeded. As with other pursu its Yeats held nothing back. He immersed himself fully in Blake's writings. As with many of his mental pursuits he deepened his understanding of the subject by writing about it. In 1887 he wrote his essay "William Blake and the Imagination." This essay articulated his thoughts on the genius of the poet William Blake. He still however had not conceived his full vision of Blake's works. In 1889 he approached Edwin Ellis, a friend of his father's, for assistance in understanding Blake. Ellis wrote of this meeting "Very little could be given him to satisfy so large a demand, but with his eye for symbolic systems, he needed no more to enable him to perceive that here was a myth as well worth studying as any that has been offered to the world (Ellis, Vol I ix)." Thus began Yeats' and Ellis' collaboration on William Blake. This collaboration came to fruition, after four years of work, with the 1893 publication of their The Works of William Blake Poetic, Symbolic, and Critical. It has been acknowledged by many scholars that Yeats' study of Blake greatly influenced his poetic expression. This gives rise to the widely held assertion that Yeats is indebted to Blake. While I concur with this assertion, I feel that the perhaps greater debt is Blake's. William Butler Yeats and William Blake :: Poetry Literature Papers William Butler Yeats and William Blake A study of William Butler Yeats is not complete without a study of William Blake, just as a study of Blake is greatly aided by a study of Yeats. The two poets are inexorably tied together. Yeats, aided by his study of Blake, was able to find a clearer poetic voice. Yeats had a respect for and an understanding of Blake's work that was in Yeats' time without parallel. Yeats first read Blake at the age of 15 or 16 when his father gave him Blake to read. Yeats writes in his essay "William Blake and the Imagination" that "...when one reads Blake, it is as though the spray of an inexhaustible fountain of beauty was blown into our faces (Yeats, Essays xxx)." Yeats believed Blake to be a genius and he never wavered in his opinion. It is his respect for Blake that caused him to study and emulate Blake. He tried to tie Blake closer to himself by stressing Blake's rumored Irish ancestry. He strove to understand Blake more clearly than anyone had before him, and he succeeded. As with other pursu its Yeats held nothing back. He immersed himself fully in Blake's writings. As with many of his mental pursuits he deepened his understanding of the subject by writing about it. In 1887 he wrote his essay "William Blake and the Imagination." This essay articulated his thoughts on the genius of the poet William Blake. He still however had not conceived his full vision of Blake's works. In 1889 he approached Edwin Ellis, a friend of his father's, for assistance in understanding Blake. Ellis wrote of this meeting "Very little could be given him to satisfy so large a demand, but with his eye for symbolic systems, he needed no more to enable him to perceive that here was a myth as well worth studying as any that has been offered to the world (Ellis, Vol I ix)." Thus began Yeats' and Ellis' collaboration on William Blake. This collaboration came to fruition, after four years of work, with the 1893 publication of their The Works of William Blake Poetic, Symbolic, and Critical. It has been acknowledged by many scholars that Yeats' study of Blake greatly influenced his poetic expression. This gives rise to the widely held assertion that Yeats is indebted to Blake. While I concur with this assertion, I feel that the perhaps greater debt is Blake's.

Emotion and Feeling in Lord Byrons Poetry Essay -- Poetry Analysis

The genre of poetry itself produces connotations based around raw emotions, especially when considering poetry from the Romanticism era. Furthermore, poetry which is based on emotions (whether negative or positive) is what makes it successful in evoking a more personal response from the reader. When exploring poetry references such as 'The English Poetic Mind' by Charles Williams, he states how when 'We are told of a thing; we are made to feel as if that thing were possible to us; and we are so made to feel it-whatever the thing may be, joy or despair...knowledge is an intense satisfaction to us '1. This statement supports the idea that a certain emotion must be within a poem, meaning if the reader is able to relate to it, the poem is more effective. However, these quotes support the importance of emotion within poetry, but what about the importance of emotion within the poet? Throughout this essay, Lord Byron will be the main poet of focus, as his notorious lifestyle suggests that t rue emotion may have been his weakness. His poems 'Fare Thee Well!' (composed 18 March 1816: From Poems (1816)) and 'When we two parted' (composed August or September 1815: From Poems (1816)) will also be the primary focus, as they represent two negative influences which happened in Byron's life that would have produced an emotional response. When first approaching Byron's poetry, the reader would find it difficult not to judge the poem without putting it in the context of his famous reputation. He was a celebrity of his time due to his lavish and liberal lifestyle. Paul West states that 'The difficulty is that if we respond to him at all, we respond to his temperament '2. But how would one respond to his poetry if they had no previous knowledg... ...ling. To complete the discussion, the assessment of Byron and his works leads to the belief that personal emotions and feelings are important, as it is through this delicate, yet expressive language, that poetry is formed. Bibliography: Williams, Charles, (1932). The English Poetic Mind. Oxford University Press West, Paul (1963). BYRON A collection of critical essays. Prentice-Hall, Inc. Marchand, Leslie A. (1957) BYRON A Biography. Volume Two. Alfred A. Knopf, Inc. Poems: 'Fare Thee Well!' by Lord Byron (composed 18 March 1816: From Poems (1816)) taken from Wu, Duncan, (2006) Romanticism An Anthology, Third Edition. Blackwell Publishing. p. 850-852. 'When we two parted' by Lord Byron (composed August or September 1815: From Poems (1816)) taken from Wu, Duncan, (2006) Romanticism An Anthology, Third Edition. Blackwell Publishing. p. 849.

Cross-Linguistic and Cross-Cultural Identity Essay

I grew up in a country whose native language is not English. But I grew up learning the English language nevertheless. In my home, we had access to English shows which I was constantly exposed to at a very young age. This is the reason why I learned English without much conscious effort. The language learning was taking place within the sub-conscious, which is the best way to learn any language: constant exposure at a very young age. Mei-Yu (1998, paragraph 2) once said that in the acquisition of oral language, â€Å"young children are active agents†, constantly refining and defining the inputs that they get from their surroundings in way that makes sense to them. Children create hypotheses about language rules, constantly filtering them through active engagement with the more competent language users in their immediate environment. Unconsciously, they learn to recognize contexts and begin acquiring fine discrimination in their use of a language. Looking back, I guess the constant exposure to the English language is the reason why I grew up knowing how to use it. There was never a conscious effort on my part to use or learn English, because it was already ingrained in my person. The people in my household knew English and spoke it on many occasions. I also had access to English books which strengthened my phonological awareness or sound-symbol relationships. This happened side by side while I was learning my mother language as well. As a child with a facility for the English language, I was subject to an excess of attention that I would not have received otherwise, had I just spoken our native tongue and nothing else. There is a prestige attached to the English language that makes people in my country take a second look and listen closely to what I have to say. They also make speculations as to whether my family is reach and if I grew up in the United States or have been travelling there on a regular basis. Such is the high stature of the English language in my country that if you speak it well enough, most people that you are rich or your family is. Growing up, my situation as a multi-lingual was even more fascinating. Perhaps it was because as I grew older, I became more aware of people’s actuations, and I am also more able to discern their motivations for why they act the way they do towards me. In my country there is a fascination for the English language because there is a fascination for the country. My people look at the United States as magical place where dreams come true, and life is generally better. To them, it seems like those who can speak the English language have greater chances of going to the United States as well. This general notion extends in every situation. That is why in every conversation where my ability to speak the English language is displayed, people seem to treat me better and pay me more attention. Sometimes, in order to avoid embarrassment, I hide my fluency in English when interacting with my community. Clearly, there is an overt favor towards those who speak the language, as if we are better than the rest of the local people. This is consistently true in all areas of endeavors, from school to social, to professional career. It is a sad situation, but true nevertheless, and I used my fluency in English and strive to make more of myself, in order to meet society’s expectations. Sometimes it can be difficult, trying to rise up to expectations, but I felt that it was my duty to do so, especially for those who sincerely believed that I could. The situation changed when I moved to the United States. If you are multi-lingual, you are regarded as ethnic, especially if your pronunciation has a very thick and recognizable accent. You will be subject to stereotyping, and in some cases, be even regarded as second class citizens. While I am not saying that everyone will react negatively to your accent or your use of your mother language, it is a reality that there are some people who will take it against you. If there is any field that multilingualism is always an advantage, and that is in the corporate world. This is especially true in the age of globalism, where most companies deal with overseas transactions. Being multilingual means that I can communicate with my colleagues, and at the same time be able to communicate with a client or supplier who speaks my mother tongue, but nothing else. Thus, I am able to bridge the communication gap and make sure that there will be no misunderstandings and conflict later on because of the language barrier. Actually, upon deeper reflection, I realize that people do not react to your multilingualism as much as they are reacting to the accent or how you speak the English language. The lesser your accent, the better people regard you. And this is true regardless or what place you are in. What we speak and how we speak, speak about our history as an individual. How we speak makes a statement towards who we are as a person. And people, for better or for worse, react to that. In an era of increasing globalization, more and more people want to learn English to make themselves more marketable and competitive. However, the value of the mother tongue should never be forgotten. Our mother language keeps our identity intact and sets us apart from the rest. Knowing English is the ship that will help us to get where we want to go, but it is our mother tongue that will be our anchor; the one that will help us find our way should we get lost. Reference Lu, Mei-Yu. (1998). Language Learning in Social and Cultural Contexts. ERIC Digest. Retrieved: April 14, 2007 from http://www. ericdigests. org/1999-2/language. htm

Company Law and Secretarial Practices Essay

Incorporation means the process of legally declaring a corporate entity as separate entity from its owners. Incorporation has many advantages for a business and its owners, including: Protects the owners’ assets against the company’s liabilities. Allows for easy transfer of ownership to another party. Achieves a lower tax rate than on personal income. Receives more lenient tax restrictions on loss carry forwards. Can raise capital through the sale of the stock. Incorporation involves drafting a â€Å"Memorandum of Association† and an â€Å"Articles of Association†, which lists the primary purpose of the business and its location, along with the number of shares and class of stock being issued, if any. Incorporation will also involve state-specific registration information and fees. Those procedures are undertaken by a promoter who is a person who starts up a business, particularly a corporation, including the financing. The formation of a corporation starts with an idea. Pre-incorporation activities transform this idea into an actual corporation and the promoter is the individual who carries on these activities. Usually the promoter is the main shareholder or one of the management team and receives stock for his/her efforts in organization. Without incorporation, Company Law cannot stand by itself as law amended is critically meant to protect the shareholders as well as the member of the company which is incorporated. As mentioned above, incorporation tends to protect the welfare of the business and its owners in various perspectives like intellectual property, taxation and capital shares. In other words, Company law (or the law of business associations) is the field of law concerning companies. Furthermore, there are various types of company that can be formed in different jurisdictions as shown in Malaysian Company Act 1965 Section 14(2) which are: a company limited by guarantee. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but they have no economic rights in relation to the company. a company limited by guarantee with a share capital. A hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return. a company limited by shares. The most common form of company used for business ventures. an unlimited company either with or without a share capital. This is a hybrid company, a company similar to its limited company (Ltd.) counterpart but where the members or shareholders do not benefit from limited liability should the company ever go into formal liquidation. Meanwhile, there are thousands of company law cases that showed that incorporation is the bedrock of formation of Company Law. As such, We held out a few cases here which clearly indicated the importance of Company Law in determining the court case related to incorporation. Salomon v A Salomon and Co Ltd [1897] AC 22 Corporate separate personality Salomon conducted his business as a sole trader. He sold it to a company incorporated for the purpose called A Salomon and Co Ltd. The only members were Mr Salomon, his wife, and their five children. Each member took one  £1 share each. The company bought the business for  £39,000. Mr Salomon subscribed for 20,000 further shares. However,  £10,000 was not paid by the company, which instead issued Salomon with series of debentures and gave him a floating charge on its assets. When the company failed the company’s liquidator contended that the floating charge should not be honoured, and Salomon should be made responsible for the company’s debts. Lord Halsbury LC stated: â€Å"†¦ it seems to me impossible to dispute that once the company is legally incorporated it must be treated like any other independent person with its rights and liabilities appropriate to itself, and that the motives of those who took part in the promotion of the company are absolutely irrelevant in discussing what those rights and liabilities are.† Hickman v Kent or Romney Marsh Sheep-Breeders’ Association ‘Outsider rights’ Hickman was a member of the Kent or Romney Marsh Sheep-Breeders Association. He began a court action complaining of various irregularities in the affairs of the association. Clause 49 of the Associations constitution stated that all disputes were to handled by arbitration. The question of whether a person who is not a member of the company has rights to sue on the ‘statutory contract’ provide by what is now section 33 of the Companies Act 2006 was considered . It was held that an outsider to whom rights are purportedly given by the company’s articles in his capacity as an outsider cannot sue in that capacity, whether he is also a member of the company or not. From this case comes the fundamental concept that a company has a legal personality or identity separate from its members. A company is thus a legal ‘person’. Macaura v Northern Assurance Co Ltd [1925] AC 619 Members have no interest in a company’s property The owner of a timber estate sold all the timber to a company which was owned almost solely by him. He was the company’s largest creditor. He insured the timber against fire, but in his own name. After the timber was destroyed by fire the insurance company refused the claim. The House of Lords held that in order to have an insurable interest in property a person must have a legal or equitable interest in that property. The claim failed as â€Å"the corporator even if he holds all the shares is not the corporation†¦ neither he nor any creditor of the company has any property legal or equitable in the assets of the corporation.† In a nutshell, the effect of incorporation which is embedded in Section 16(5) â€Å"On and from the date of incorporation specified in the certificate of incorporation but subject to this Act the subscribers to the memorandum together with such other persons as may from time to time become members of the company shall be a body corporate bby the name contained in the memorandum capable forthwith of exercising all the functions of an incorporated company and of suing and being sued and having perpetual succession and a common seal with power to hold land but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is provided by this Act† clearly demonstrated that the foundation of Company Law is the ‘company’ and that without incorporation and the creation of a separate corporate personality, there couldn’t be a base for the formation of Company law and Companies Act. 2. In practice, in no circumstances, is it possible to pierce the corporate veil between a parent and a subsidiary company. A company is an artificial person. Once it is incorporated, it comes into being and is a separate legal entity from its members and officers. The importance of the principle of separate legal entity was first established in the landmark case of Salomon v Salomon & Co Ltd (1897). In this case, Mr Salomon was a sole-proprietor manufacturing boots. The business was successful. Mr Salomon incorporated a company and sold his business to the company in consideration for 20000 shares and debentures of  £10000 issued in favour of Mr Salomon. Mr Salomon ended up holding 20001 of the 20007 shares issued. The other six shared were held by his wife and five children as nominees for Mr Salomon. Unfortunately, the company experienced financial difficulty and was wound up. An action was brought against Mr Salomon to indemnify the company for all the debts due to its unsecured creditors. The House of Lords held that even though the business was managed by the same persons and the same hands received the profits, the company was not an agent or trustee for the members. Incorporation of the company created a separate person. The members were not liable in respect of the company’s obligations. The same applies to parent and subsidiary companies. Both parent and subsidiary companies has their own separate legal entity. One example is the case of The People’s Insurance Co (M) v The People’s Insurance Co Ltd (1986). In this case, the plaintiff company, People’s Insurance Co. (M) Sdn. Bhd. (PICMSB) was a subsidiary of the first defendants company, People’s Insurance Co. Ltd. (PICL). On 12 January 1978, five directors of PICMSM held a meeting. One of the directors was the Managing Director of the defendant (PICL), another one was General Manager and Director of the defendant (PICL), and another one was Executive Director of the defendant (PICL). During the meeting they passed a resolution that affected PICL. The defendant (PICL) denied any liability. The court held that: i. The parent and subsidiary companies are two separate legal entities; ii. Officers of the parent company who are on the Board of the subsidiary are not representatives of the parent company but sit at the Board Meeting as directors and agent of the subsidiary iii. A resolution of the Board of directors of the subsidiary does not bind the parent company. The resolution did not constitute a contract between the parties. Thus, it is held that the principle of separate legal entity applies as well to related companies, including wholly owned subsidiaries. In Adams v Cape Industries PLC (1990), the main defendant was an English registered company presiding over a group of companies whose business was in the mining (in South Africa), and marketing, of asbestos. The company had become the subject of a class action lawsuit in the United States, and the company tried to avoid fighting the case in the American courts on jurisdictional grounds. The Plaintiffs obtained a judgment against the English company in the American courts, but as Cape had no assets left in the U.S., they then sought to enforce the judgment against the principal company in the group in the English courts. The court accepted that the purpose of the corporate group structure set up by Cape Industries had been used specifically to ensure that the legal liability of a particular subsidiary would fall only upon itself and not the parent company in England. The court refused to pierce the veil of incorporation to allow the judgment creditor to enforce its judgment against the judgment debtor’s holding company. The court refused to treat both the subsidiary and holding companies as one single entity. However the legislature recognizes that there may arise circumstances when this principle of separate legal entity may lead to adverse positions, and thus have enacted statutory exceptions to lift the veil of incorporation under specified circumstances. Normally in new situations or circumstances, court decides on case by case basis to pierce the veil of incorporation. There are instances where the court held that the related companies do not have separate legal entities; they are indeed one legal entity. In DHN Food Distributors Ltd v London Borough of Tower Hamlets (1976), DHN carried on the business of operating a grocery on the property owned by one of its wholly owned subsidiaries. The property was compulsorily acquired by the authority which refused to pay compensation to DHN as it did not have any interest on the land. The English Court of Appeal held that the group operated as a single economic unit and thus DHN could recover the compensation due to them under law. In conclusion, in normal practice with no circumstances, it is not possible to pierce the corporate veil between a parent and a subsidiary company as mentioned in The People’s Insurance Co (M) v The People’s Insurance Co Ltd (1986) and Adams v Cape Industries PLC (1990). Only when there arise circumstances can only the corporate veil of a parent and subsidiary company be pierced. 3a. Joe and Mike issue sufficient RM1 shares to Luke to raise his stake to 40% to allow them to defeat the resolution of their removal from the board. The action proposed by Joe and Mike is not allowed under section 132D of Companies Act 1965. Section 132D(1) of the Act reads, â€Å"notwithstanding anything in a company’s memorandum or articles, the directors shall not, without the prior approval of the company in general meeting, exercise any power of the company to issue shares†. Unless the power to issue shares has been vested in the members at a general meeting, the directors are not allowed to issue shares. Under this section, the company’s power to issue shares is not transferred from the directors to the members in general meeting. Rather, it imposes an obligation on the directors to obtain the approval of the company’s shareholders in general meeting before exercising their power to issue shares. When an allotment of shares takes place by the company without compiling without any statutory procedure, it is an irregular allotment. Although it is necessary to obtain only an ordinary resolution for the issuance of new shares, section 132D (5) requires such resolution to be lodged with the Registrar of Companies (ROC). When the minimum subscription is not received, it is an irregular allotment and it is void. The directors are liable to pay both the company and also to the allotee. On the other hand, prior approval of the members is not required if the shares issued are consideration or part consideration for the acquisition of shares or assets by the company. Section 132D (6A) provides that if the consideration for the shares in kind or partially in kind, it is sufficient for the directors to inform the members in writing at least 14 days before the shares are issued. The consequences for non compliance of section 132D are provided in section 132D (6) which reads, â€Å"Any issue of shares made by a company in contravention of this section shall be void and consideration given for the shares shall be recoverable accordingly†. In fact, the directors are liable to compensate the company and the allottee for any loss, damages or costs which might occur as a result of the breach. According to section 132D (7), â€Å"any director who knowingly contravenes, or permits or authorizes the contravention of, this section with respect to any issue of shares shall be liable to compensate the company and the person to whom the shares were issued for any loss, damages or costs which the company or that person may have sustained or incurred thereby†. Thus, Joe and Mike shall be liable to pay compensation to the company and Luke if any loss or cost incurred. However, the shareholders or creditor of the company may apply to the court for validation of the shares under section 63. If the court finds the issuance of shares is just and equitable, the court may order the validation of the shares which were not properly issued. In the case of Kepala Sawit (Teluk Anson) Sdn Bhd v Yeoh Kim Leng & Ors (1991), the court held that â€Å"an act of the company which is irregular offers room for its regularization or validation by application of the just and equitable principles embodied in section 63†. Nevertheless, it seems to be impossible for the court to validate the shares in the situation above if any appeal is made. Besides that, the intention of Joe and Mike to raise Luke’s shares is to allow him to defeat the resolution of their removal from the board. Section 128 of the Companies Act 1965 provides for the removal of a director of a public company but no provision is made for the removal of a director of a private company. This is left to the company’s article. Article 69 of Table A provides that the company may by ordinary resolution remove a director. Thus, if Singing Stars Sdn Bhd’s article has adopted Table A, then the procedure provided in Section 128 has to be followed. Also, depending on the company’s article, either an ordinary or special resolution has to be passed in the meeting by the shareholders of the company. In business or commercial law, ordinary resolution is a resolution passed by the shareholders of a company generally affirmed by not less than 50% of the members casting their votes, whereas special resolution is generally affirmed by not less than 75% of members casting their votes. Therefore, even if Luke’s stake can be raised to 40%, he still can’t defeat the resolution because a resolution is passed based on the voting cast by the majority in the meeting. Hence, Tony shall not worry about Joe’s and Mike’s action in raising Luke’s stake to 40% by issuing shares as its legality is bounded by section 132D of Companies Act 1965. Also, the removal of a director is allowed when a resolution is passed in the meeting. With only Joe, Mike and Luke to defeat the resolution, the resolution to remove them off as the directors can still be passed. 3b. After this they will pass resolutions to remove Tony from the board and to replace him with Luke. Directors are agents of the company and thus owe a fiduciary duty towards the company. Section 4(1) of the Companies Act 1965 provides that, â€Å"director includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director†. Section 4(1) states that a director includes a de facto director, a shadow director and an alternate or substitute director. Sections 122(1) and (1A) of the Companies Act 1965 provides that, â€Å"every company shall have at least two directors, who each has his principal or only place of residence within Malaysia†. Sections 122(2) of the Companies Act 1965 provides that, â€Å"no person other than a natural person of full age shall be a director of a company†. This is clear that only a human being can be a director. Besides that, Section 122(2) imposes the minimum age of the director which is 18 years old. Thus, only a person who is 18 years old and above may be appointed as a director. Section 129 of the Companies Act 1965 provides that, â€Å"notwithstanding anything in the memorandum or articles of the company no person of or over the age of seventy years shall be appointed or act as a director of a public company or of a subsidiary of a public company†. A person who aged 70 years old and above can only be a director if the resolution appointing him as a director receives approval from at least 75% of the votes at the company’s annual general meeting. The office of a Tony as a director may become vacant if he is disqualified pursuant to the Companies Act 1965 or the articles of association, resigned from the position, removed from the board of directors and retires by rotation. Articles of association of the company provides that the office of a director shall become vacant if the director (a)ceases to be a director by virtue of the Companies Act 1965 (b)becomes a bankrupt or makes any arrangement or composition with his creditors generally (c)is prohibited from being a director by reason of any order made under the Companies Act 1965 (d)becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to metal disorder (e)resigns his office by notice in writing to the company (f)for more than six months is absent without the permission of the directors from meetings of the directors held during that period (g) without the consent of the company in general meeting holds any other office of profit under the company except that of managing director or manager (h)is directly or indirectly interested in any contract or proposed contract with the company and fails to declare the nature of his interest in a ma nner required by the Companies Act 1965. Tony will not be removed as he is not disqualified by the articles of association. The resignation of a director may take effect on the date which the board receives the letter of resignation, the date stated in the letter or according to the articles of association. Section 122(6) of the Companies Act 1965 provides that, â€Å"notwithstanding anything contained in this Act or in the memorandum or articles of a company or in any agreement with a company, a director of a company shall not resign or vacate his office if, by his resignation or vacation from office, the number of directors of the company is reduced below the minimum number required by subsection (1) and any purported resignation or vacation of office in contravention of this section shall be deemed to be invalid†. Tony does not take action to resign from a director. Tony will not be removed from the board. However, he may be removed from the board by an ordinary resolution. Section 128(1) of the Companies Act 1965 provides that, â€Å"a public company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its memorandum or articles or in any agreement between it and him but where any director so removed was appointed to represent the interests of any particular class of shareholders or debenture holders the resolution to remove him shall not take effect until his successor has been appointed†. A public company may remove a director by ordinary resolution before the expiration of his term of office. The resolution is passed if it garnered more than half of the votes casted. A director of a public company is not possible to be removed by other director as provided in Section 128(8) which reads that, â€Å"a director of a public company shall not be removed by, or be required to vacate his office by reason of, any resolution request or notice of the directors or any of them notwithstanding anything in the articles or any agreement†. Thus, Joe and Mike are not able to remove Tony from the board. To remove a director, a special notice of the resolution is required to serve to the company at least 28 days before the scheduled members’ meeting as stated in Section 128(2) of the Companies Act 1965, â€Å"Notwithstanding anything to the contrary in the memorandum or articles of the company, special notice shall be required of any resolution to remove a director or to appoint some person in place of a director so removed at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting†. The special notice of ordinary resolutions is also called notice of intention is given by the members to the company at least 28 days before the scheduled meeting. Then the company must give at least 14 days’ notice to the members before the meeting is scheduled to be held. It is provided in Section 153 of the Companies Act 1965, â€Å" where by this Act special notice is required of a resolution, the resolution shall not be effective unless notice of intention to move it has been given to the company not less than twentyeight days before the meeting at which it is moved, and the company shall give its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting or ,if that is not practicable, shall give them notice thereof, in any manner allowed by the articles, not less than fourteen days before the meeting, but if after the notice of intention to move such a resolution has been given to a company, a meeting is called for a date twenty-eight days or less after the notice has been given, the notice, although not given to the company within the time required by this section, shall be de emed to be properly given†. The board of directors may attempt to undermine the members’ proposal to remove a director, the board may call for the meeting to be scheduled less than 28 days from the receipts of the members’ notice. Section 153 of the Companies Act 1965 provides that the meeting is not invalidated if it is held less than 28 days after the notice was given by the members to the company. In Soliappan v Lim Yoke Fan [1968] 2 MLJ 21, the High Court held that Section 128 was not mandatory. The power to remove directors under that section co-existed with any power contained in the articles of association. Therefore, 28 days notice is not necessary, the removal could be affected in accordance with the articles of association. However, on the facts the proper notice required under the articles of association had not been given either, so removed as director and consequently the plaintiff was not properly appointed as director of the company. If Tony is removed from the board, he may claim compensation or damages for the termination of his appointment as a director. Where the company has entered into a contract with Tony and the company breached it by removing him, then Tony has the rights to claim compensation. Section 128(7) of the Companies Act 1965 provides that, â€Å"nothing in subsections (1) to (6) shall be taken as depriving a person removed thereunder of compensation or damages payable by him in respect of the termination of his appointment as director or of any appointment terminating with that as director or as derogating from any power to remove a director which may exist apart from this section†. Tony who is appointed as a director is not required to retire unless the articles of association provides so. Upon retirement, the shareholders may re-elect the directors who have performed but not those who failed to perform up to expectations. In See Teow Chuan & Anor v YAM Tunku Nadzaruddin Ibni Tuanku Jaafar & Ors [2007] 2 MLJ 212, the board of directors made a resolution that all executive directors must retire on attaining 55 years of age. The plaintiffs brought an action challenging the introduction of a new term into their existing contract that they should retire. The court held that the power to pass the resolution as to retirement of directors was a fiduciary power entrusted by the memorandum and articles of the Company. That power was used for a collateral or improper purpose, namely to remove the plaintiffs and was invalid. In conclusion, Joe and Mike are unable to remove Tony from the board and replace Tony with Luke. Tony will be removed from the board if he meets one of the events stated above. 3c. As an added incentive the shares will be issued to Luke for RM0.60 each to allow for a tidy profit. The issue here is whether Joe and Mike can issue shares to Luke at RM0.60 each to allow for Luke’s support towards them. The issuance of shares below the nominal value of RM1.00 is called issuance of shares at a discount. At common law, the issuance of shares below the par value (at a discount) is prohibited because it constitutes a reduction of share capital without confirmation by the High Court. Section 64 of the Companies Act 1965 requires a special resolution that authorizes the reduction of its share capital with the confirmation by the Court. Case : Re Wragg Ltd. Facts : A liquidator took up a court case seeking a declaration that certain shares in the company issued to two members and registered in their names as fully paid were not properly issued as fully paid up. The liquidator asked for an order that the two members pay the amounts unpaid thereon. Held : The transaction was wholly legitimate. Lindley L.J. stated â€Å"it is not law that persons cannot sell property to a limited company for fully paid-up shares and make a profit by the transaction. We must not allow ourselves to be misled by talking of value. The value paid to the company is measured by the price at which the company agrees to buy what it thinks it worth it while to acquire. Whilst the transaction is unimpeached, this is the only value to be considered.† However, there are two exceptions to the rule against issuing shares at a discount that are stated in Section 58 and 59 of Companies Act 1965. In occasions where the company enters into an underwriting agreement wherein the underwriter will subscribe the shares in the company if the shares are not taken, in return, the company agrees to pay the underwriter a fee. Section 58 of Companies Act 1965 recognises this commercial agreement provided that the payment of that commission is not more than 10% of the issued value of the shares and is authorized by the company’s articles. Section 59(1) of the Companies Act 1965 states that the company can issue shares at a discount of a class already issued if – (a) The discounted shares are authorized by ordinary resolution passed in general meeting of the company and is confirmed by Court order; (b) The resolution specifies the maximum rate of discount at which the shares are to be issued; (c) the company can only issue shares at a discount only after one year it is entitled to commence business; and (d) the discounted shares must be issued within one month from court’s confirmation or within extended time as allowed by Court. According to section 59(4), the discounted shares must be offered to existing members of that class based on pro rata basis. Failure to do so, the company and every officer who is in default shall be guilty of an offence punishable with a fine of RM1000 and default penalty in accordance with section 59(7) of the Companies Act 1965. Case : Ooregum Gold Mining Co of India v Roper Facts : The market value of the  £1 ordinary shares of the company was 2 shillings and 6 pence (2s 6d). The company issued preference shares of  £1 each with 15s credited as paid, leaving a liability of only 5s a share. Held: The holders of the discounted shares are liable to pay the full nominal value to the company. In common law, issuance of shares at a discount is prohibited but there are statutory exceptions under section 58 and 59 which enable the company to issue shares at a discount. In this case, Luke is not the underwriter of Singing Stars Sdn Bhd. Therefore, Joe and Mike cannot issues shares at a discount to him by virtue of section 58 of the Companies Act 1965. However Luke can be entitled to get the shares at a discount if the discounted shares are passed by a majority of members who are present and votes at the meeting and confirmed by the Court order, which specify the maximum rate of discounts are to be issued, commence it’s business after one year and issue the discounted shares issued within one month from court’s confirmation or within extended time as allowed by Court, then Luke can be entitled to the discounted shares after the existing shareholders are offered the discount. Luke will not be getting the shares at a discount because the most of shareholders are not satisfied with Joe and Mike and wanted to vote them from the board. Hence, the majority of them will win and Luke will definitely not getting his shares at a discount. If Joe and Mike insist on issuing the shares at a discount to Luke, the holder of the shares (Luke) may be liable to pay the full nominal value of the shares as stated in the Ooregum principle. Besides, the directors (Joe and Mike) who are responsible for the unlawful issue may be held liable to the company for the discount allowed. In conclusion, Tony can sue Joe and Mike for breach of companies act and they will be held liable to company in respect of the discount allowed. From the above Tony and the other four shareholders can vote to reject the acceptance of payment by land from Luke for the shares. Joe and Mike do not have the power to accept the payment without the knowledge of the members of the company. If the transaction is still done Section 132D(6) provides that the shares issued are void and the directors shall be liable to compensate the company and the person whom the shares were issued to for any loss, damages or costs which they may sustain as consequence of the breach. 3d. Luke has suggested that the company might accept some land which he owns as payment for the shares. Section 67 (1) of the Companies Act prohibits a company from: Financing the purchase of its own or its holding company’s shares Giving financial assistance for the purpose of or in connection with the purchase of its own or its holding company’s shares Dealing in or lending money on its own shares In the case of Datuk Tan Leng Teck v Sarjana Sdn Bhd, the plaintiff entered into a contract to sell a piece of land to the 2nd defendant, Pasti Hasil Sdn Bhd for a piece of land at a price of RM15, 896,995. According to the agreement, RM1,000,000 of the purchase consideration will be capitalized as paid-up capital for 1,000,000 shares in the SSB. PHSB had paid RM3,300,000 for the land to SSB and RM1,000,000 out of this payment had been considered as a payment for 1,000,000 shares in SSB. Thus, 1,000,000 shares had been allotted to Pasti Hasil Sdn Bhd. The court held that financial assistance has been given to Pasti Hasil Sdn Bhd as the defendant agreed to treat a portion of the sum owed by Pasti Hasil Sdn Bhd as payment for the shares. Section 67 (1) prohibits the company from giving financial assistance unless it is bona fide commercial transaction entered in good faith. As Pasti Hasil Sdn Bhd had not paid anything for the shares the share capital of the defendant had reduced. In the case of Belmont Finance Corporation Ltd v Williams Furniture Ltd (No 2), Belmont’s directors paid  £500,000 of Belmont’s money under a scheme to help a company called Maximum ( which was owned and controlled by a Mr. Grosscurth) to buy shares of Belmont. Goff LJ held that the agreement was unlawful and the payment was made by Belmont for an illegal purpose, namely to facilitate the purchase by Grosscurth and his associates of Belmont’s shares. Lord Denning in Wallersteiner v Moir (1974) propounded the following test: â€Å"You look to the company’s money and see what has become of in. You look to the company’s shares and see into whose hands they have got. You will then see if the company’s money has been used to finance the purchase.† Thus for this case if the company accepts Luke’s land as payment for the shares, it is not a bona fide commercial transaction entered in good faith and is prohibited by section 67(1). Thisi s because the land serves no specific purpose to the company and future benefits will not flow to the company through this entity. This means that the land is of no use to the company at the time of purchase which shows that it is not a bona fide commercial transaction. Furthermore this also shows that the company’s money paid to Luke for the land will be used to purchase its shares. If Joe and Mike accept this transaction, they will be guilty under section 67(3) of the Companies Act and section 67(4) provides that officers who are guilty are liable to compensate the company or any person who has suffered losses or damage as a result of the prohibited transaction. REFERENCES 1) http://www.scribd.com/doc/64780622/1/S128-1-Companies-Act-1965 2) http://www.ssm.com.my/files/clrc/consultation_documents/cd2.pdf 3) Chan Wai Meng (2012) . Company Law in Malaysia: Cengage Learning.